Ante Up: Contributors To Social Inflation

Social inflation continues to drive the rising cost of insurance claims, translating into premium increases for many industries. But what is to blame for this persisting trend in high jury awards?

Social inflation describes the rising cost of insurance claims resulting from events, such as increasing litigation, broader definitions of liability, more plaintiff-friendly legal decisions and larger compensatory jury awards.

Unlike price inflation, it is caused by sentiments within society and can be associated with emotional factors.

‘Several industries and social factors are responsible for the increase in litigation and have formed a sense of corporate mistrust among juries,’ said Geoff Dobran, Claims Manager at Safety National.

‘The opioid crisis associated with the medical industry, wildfires associated with utility companies and sexual molestation litigation associated with public entities are just a few cases that have been largely publicized, which can reasonably affect a jury member’s opinion of a defendant.’